House of Representatives Committees

Preliminary pages

Foreword

The idea of recognising local government in the Constitution
has been around for many decades. It has been a long-standing feature of the
platform of most local government bodies. It is now an idea whose time has come
for a very specific reason. Recent cases in the High Court have created
considerable uncertainty about the Commonwealth’s power to provide funding
directly to local government. A constitutional remedy to this uncertainty
requires the financial recognition of local government in the Constitution. The
relevance to Australian communities of this matter at this point in time is
certainty for the Commonwealth funding of vital services that are delivered by
local governments across Australia. A successful referendum would return
Australia to the widely understood status quo that existed before those recent
High Court cases, and ensure the needs of communities are met through the
continuation of important programs like Roads to Recovery.

The Joint Select Committee on Constitutional Recognition of
Local Government was appointed in late 2012 to build on the work of the Expert
Panel on Constitutional Recognition of Local Government. The Panel’s report
recommended that the Committee be established and made suggestions about the
kind of work the Committee should undertake.

The Parliament has directed the Committee to inquire into
‘financial recognition of local government‘, which is the majority finding of
the Expert Panel. The Committee’s terms of reference include assessing the
likelihood of success for such recognition through a referendum, the
consequences of recognition for local, state and territory governments, as well
as whether and when a referendum should be put.

The Committee has built on the considerable work of the
Expert Panel, including the comprehensive consultation that the Panel
conducted. The Panel suggested that holding a referendum was a viable option
for 2013, and evidence to the Committee has confirmed this. The Committee has
recommended a referendum be held at the same time as the 2013 Federal Election.

The Committee has sought stakeholders’ views on the
particular wording proposed by the Expert Panel, and is confident that the
recommended wording will remedy the uncertainty surrounding Commonwealth direct
funding of local government. At the same time, state and territory governments
may not be immediately comfortable with the wording. The Commonwealth should
now proceed to negotiate with state and territory governments to secure their
support for the wording. The local government sector must now also redouble its
negotiation and lobbying efforts to secure state and territory government
support for a referendum. This issue needs to be resolved as soon as possible,
and stakeholders must take this opportunity to create the right conditions for
reform.

There are a number of preparatory activities that the Expert
Panel recommended, and the Committee has recommended that a number of these
commence immediately. These activities will need to begin in the coming weeks,
and will help to build public support for the referendum proposal.

This process – from the Expert Panel, to this Parliamentary
Committee, and now to the Government – has been designed to ensure that
stakeholders are included and listened to, and to elicit broad bipartisan
support for a referendum. The Committee has continued the methodical
consultation and discussion begun by the Expert Panel, and will continue in
this vein as it prepares its final report, which will be tabled later this
year. While this formal process has taken place, the Minister for Regional
Australia, Regional Development and Local Government and local government
bodies have been working in the background to build consensus and support for a
referendum. This work will now take prominence as support for a referendum is
secured, and as a national conversation about this issue takes place.

I thank all Members and Senators for their work on this
inquiry, and commend this preliminary report to the Parliament.

Ms Michelle Rowland MP
Chair

Membership
of the Committee

Chair

Ms Michelle Rowland MP

Deputy
Chair

Senator David Bushby

Members

Mr Mark Coulton MP

Senator Lee Rhiannon

Senator Trish Crossin (until 29 November 2012)

Senator the Hon Lisa Singh(from 29 November 2012)

Senator David Fawcett

Senator Glenn Sterle

Mr Steve Irons MP

Mr Tony Windsor MP

Ms Kirsten Livermore MP

Mr Tony Zappia MP

Mrs Jane Prentice MP

Committee Secretariat

Secretary

Dr Glenn Worthington

Inquiry
Secretary

Mr Thomas Gregory

Advisor

Ms Elly Cotsell

Research
Officer

Ms Leonie Bury

Office
Manager

Mr Daniel Miletic

Administrative
Officer

Ms Emily Costelloe

Resolution
of appointment

(1) a
Joint Select Committee on Constitutional Recognition of Local Government be
appointed to inquire into and report on the majority finding (financial
recognition) of the Expert Panel on Constitutional Recognition of Local
Government including by amending section 96 of the Constitution, and in
conducting its inquiry, the Committee will assess the likelihood of success of
a referendum on financial recognition, and will take into account the following
matters:

the
report of the Expert Panel on constitutional recognition of Local Government,
including preconditions set by the Expert Panel for the holding of a
referendum;

the
level of State and Territory support;

the
potential consequences for Local Government, States and Territories of such an
amendment; and

any
other matters that the Committee considers may be relevant to a decision on
whether to conduct a referendum, and the timing of any referendum;

(2) the
Committee consist of twelve members, three Members of the House of
Representatives to be nominated by the Government Whip or Whips, three Members
of the House of Representatives to be nominated by the Opposition Whip or
Whips, and one non-aligned Member, two Senators to be nominated by the Leader
of the Government in the Senate, two Senators to be nominated by the Leader of
the Opposition in the Senate and one Senator to be nominated by any minority
group or groups or independent Senator or independent Senators;

(3) every nomination
of a member of the Committee be notified in writing to the President of the
Senate and the Speaker of the House of Representatives;

(4) the
members of the Committee hold office as a Joint Select Committee until
presentation of the Committee’s report or the House of Representatives is
dissolved or expires by effluxion of time, whichever is the earlier;

(5) the
Committee elect:

a
Government Member as Chair; and

an
Opposition Member as its Deputy Chair who shall act as Chair of the Committee
at any time when the Chair is not present at a meeting of the Committee, and at
any time when the Chair and Deputy Chair are not present at a meeting of the
Committee the members present shall elect another member to act as Chair at
that meeting;

(6) in the
event of an equally divided vote, the Chair, or the Deputy Chair when acting as
Chair, has a casting vote;

(7) three
members of the Committee constitute a quorum of the Committee provided that in
a deliberative meeting the quorum shall include one Government Member of either
House, and one non Government Member of either House;

(8) the
Committee has power to appoint subcommittees consisting of three or more of its
members and to refer to any subcommittee any matter which the Committee is
empowered to examine;

(9) the
Committee appoint the Chair of each subcommittee who shall have a casting vote
only and at any time when the Chair of a subcommittee is not present at a
meeting of the subcommittee the members of the subcommittee present shall elect
another member of that subcommittee to act as Chair at that meeting;

(10) two
members of a subcommittee constitute the quorum of that subcommittee, provided
that in a deliberative meeting the quorum shall include one Government Member
of either House and one non Government Member of either House;

(11) members
of the Committee who are not members of a subcommittee may participate in the
proceedings of that subcommittee but shall not vote, move any motion or be
counted for the purpose of a quorum;

(12) the Committee
or any subcommittee:

has
power to call for witnesses to attend and for documents to be produced;

may
conduct proceedings at any place it sees fit; and

has
power to adjourn from time to time and to sit during any adjournment of the
Senate and the House of Representatives;

(13) the
Committee may report from time to time but that it present a preliminary report
no later than December 2012 if possible, and a final report no later than
February 2013; and

(14) the
provisions of this resolution, so far as they are inconsistent with the
standing orders, have effect notwithstanding anything contained in the standing
orders.

List of recommendations

Recommendation 1

The Committee recommends that a referendum on financial
recognition of local government be held in 2013.

Given the importance of securing state and territory support,
the Committee further recommends that, in addition to the efforts of the local
government sector, Commonwealth Government Ministers, particularly the Minister
for Regional Australia, Regional Development and Local Government, the
Attorney-General and the Special Minister for State, immediately commence
negotiations with state and territory governments to secure their support for
the referendum proposal.

Recommendation 2

The Committee recommends that the referendum propose an
amendment to Section 96 of the Constitution:

…the Parliament may grant financial assistance to any State or
to any local government body formed by State or Territory legislation on
such terms and conditions as the Parliament thinks fit.

Recommendation 3

The Committee recommends that a referendum on financial
recognition of local government be held at the same time as the 2013 federal
election.

Recommendation 4

The Committee recommends that the Commonwealth Government
begin all necessary preparatory activities to ensure a successful outcome for a
referendum on financial recognition in 2013. The preparatory activities
include:

the
Australian Electoral Commission begin the necessary preparatory activities for
a referendum in 2013;

the
Department of Regional Australia, Local Government, Arts and Sport, as lead
coordinating and implementing agency, take the necessary steps for implementing
a national civics education campaign and managing funding of partisan
campaigns;

the
Attorney-General’s Department release a draft of the constitution amendment
bill by 31 January 2013 in order to begin the process of public consultation;

temporary
amendments be made to the Referendum (Machinery Provisions) Act 1984, to
effect the following outcomes:

remove
the legislative limit on Government spending;

confirm
that Parliamentarians should draft and approve the ‘Yes’ and ‘No’ cases for the
official referendum pamphlet for financial recognition of local government. In
the event that there is no requirement for a ‘No’ case, the Committee
recommends that there should be an official ‘Yes’ case only;

allow
the official Yes/No pamphlet to be sent to every household rather than every
voter;

enable
a range of communication methods to educate and reach across all Australian
demographics; and

use
format guidelines for the official ‘Yes/No’ referendum pamphlet to ensure the
factual nature and comparability of the cases in the hands of voters.